Question 1

Refer to the above graph, which shows the market for bicycles. S1 and D1 are the original supply and demand curves. D2 and D3 and S2 and S3 are possible new demand and supply curves. Starting
From the initial equilibrium (point 1) , what point on the graph is most likely to be the new equilibrium
After a sharp increase in traﬃc accidents involving cyclists and the payment of subsidies to bicycle
Producers?

Accepted Answer

A)   3
B)   4
C)   5
D)   6E) A) and B)
F) B) and C)

Question 2

(Consider This)  Dynamic pricing refers to

Accepted Answer

A)   the ability to set equilibrium prices in real time in response to changing supply and demand conditions.
B)   the rapid inﬂation that occurs in economies without a stable money supply.
C)   pricing tickets so low that an athletic or artistic event is guaranteed to sell out and create a buzz among fans.
D)   reselling a good at a price above its original purchase price.E) A) and B)
F) A) and C)

Question 3

The rationing function of prices refers to the fact that government must distribute any surplus goods
that may be left in a competitive market.

Accepted Answer

A) True 
 B)False

Question 4

All of the following would affect the position of the supply curve for cranberries, except the

Accepted Answer

A)   popularity of cranberry drinks.
B)   price of agricultural land for cranberries.
C)   cost of fertilizers for cranberry production.
D)   development of a new pest control for cranberries.E) A) and B)
F) C) and D)

Question 5

Refer to the above graph, which shows the market for bicycles. S1 and D1 are the original supply and demand curves. D2 and D3 and S2 and S3 are possible new demand and supply curves. Starting
From the initial equilibrium (point 1) , which point on the graph is most likely to be the new equilibrium
After an increase in wages of bicycle workers, and a signiﬁcant increase in the price of gasoline?

Accepted Answer

A)   6
B)   3
C)   4
D)   5E) A) and B)
F) B) and C)

Question 6

When the price of oil declines signiﬁcantly, the price of gasoline also declines. The latter occurs because of a(n)

Accepted Answer

A)   increase in the demand for gasoline.
B)   decrease in the demand for gasoline.
C)   increase in the supply of gasoline.
D)   decrease in the supply of gasoline.E) B) and C)
F) A) and D)

Question 7

A government-set price ﬂoor on a product

Accepted Answer

A)   does not interfere with the rationing function of price in a market system.
B)   will drive resources away from the production of the product.
C)   will attract more resources toward the production of the product.
D)   is intended to beneﬁt the buyers of the product.E) None of the above
F) All of the above

Question 8

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. Other things equal, a shift of the supply curve from S0 to S1 might be caused by a(n)

Accepted Answer

A)   increase in the wage rates paid to laborers employed in the production of X.
B)   government subsidy per unit of output paid to ﬁrms producing X.
C)   decline in the price of the basic raw material used in producing X.
D)   increase in the number of ﬁrms producing X.E) A) and B)
F) A) and C)

Question 9

(1) (2) (3) (4) (5) QdQd Price QSQS5040$1070806050960708060850609070740501008063040\begin{array} { | c | c | c | c | c | } \hline ( 1 )  & ( 2 )  & ( 3 )  & ( 4 )  & ( 5 )  \Q _ { d } & Q _ { d } & 	ext { Price } & Q _ { S } & Q _ { S } \\hline 50 & 40 & \$ 10 & 70 & 80 \\hline 60 & 50 & 9 & 60 & 70 \\hline 80 & 60 & 8 & 50 & 60 \\hline 90 & 70 & 7 & 40 & 50 \\hline 100 & 80 & 6 & 30 & 40 \\hline\end{array}(1) Qd​50608090100​(2) Qd​4050607080​(3)  Price $109876​(4) QS​7060504030​(5) QS​8070605040​​  Refer to the table. In relation to column (3) , a change from column (5)  to column (4)  would indicate a(n)

Accepted Answer

A)   increase in demand.
B)   decrease in demand.
C)   increase in supply.
D)   decrease in supply. E) B) and C)
F) None of the above

Question 10

One can say with certainty that equilibrium price will decline when supply rev: 08_10_2020_QC_CS-222790

Accepted Answer

A)   and demand both decrease.
B)   increases and demand decreases.
C)   decreases and demand increases.
D)   and demand both increase.E) A) and B)
F) A) and C)

Question 11

A large increase in the supply of smart TVs occurs simultaneously with a smaller decrease in its demand. As a result, the equilibrium price will

Accepted Answer

A)   increase and the equilibrium quantity will decrease.
B)   increase and the equilibrium quantity will increase.
C)   decrease and the equilibrium quantity will decrease.
D)   decrease and the equilibrium quantity will increase.E) All of the above
F) A) and D)

Question 12

(1) (2) (3) (4)  (5)  QdQd Price QSQS5040$1070806050960708060850609070740501008063040\begin{array} { | c | c | c | c | c | } \hline ( 1 )  & ( 2 )  & ( 3 )  & ( 4 )  & 	ext { (5)  } \Q _ { d } & Q _ { d } & 	ext { Price } & Q _ { S } & Q _ { S } \\hline 50 & 40 & \$ 10 & 70 & 80 \\hline 60 & 50 & 9 & 60 & 70 \\hline 80 & 60 & 8 & 50 & 60 \\hline 90 & 70 & 7 & 40 & 50 \\hline 100 & 80 & 6 & 30 & 40 \\hline\end{array}(1) Qd​50608090100​(2) Qd​4050607080​(3)  Price $109876​(4) QS​7060504030​ (5)  QS​8070605040​​  Refer to the table. In relation to column (3) , a change from column (4)  to column (5)  would most likely be caused by

Accepted Answer

A)   government placing an excise tax on the good.
B)   an improvement in production technology.
C)   an increase in consumer income.
D)   an increase in input prices. E) A) and D)
F) C) and D)

Question 13

In the diagrams below, the subscript "1" refers to the initial position of the curve, while the subscript "2" refers to the ﬁnal position after the curve shifts.
 In which diagrams would we see a shortage at the initial price after the indicated curve has shifted?

Accepted Answer

A)   A and D
B)   B and D
C)   B and C
D)   A and CE) None of the above
F) A) and C)

Question 14

The market system automatically corrects a surplus condition in a competitive market by

Accepted Answer

A)   raising the price of the commodity in question while increasing the quantity demanded.
B)   raising the price of the commodity in question while decreasing the quantity demanded.
C)   reducing the price of the commodity in question while increasing the quantity demanded.
D)   reducing the price of the commodity in question while decreasing the quantity demanded.E) A) and B)
F) C) and D)

Question 15

If the market price is above the equilibrium price,

Accepted Answer

A)   a shortage will occur and producers will produce more and lower prices.
B)   a surplus will occur and producers will produce less and lower prices.
C)   a surplus will result and consumers will bid prices up.
D)   producers will make extremely high proﬁts.E) B) and C)
F) None of the above

Question 16

Since their introduction, prices of Blu-ray players have fallen and the quantity purchased has increased. This statement

Accepted Answer

A)   suggests that the supply of Blu-ray players has increased.
B)   suggests that the demand for Blu-ray players has increased.
C)   constitutes an exception to the law of demand in that they suggest an upward-sloping demand curve.
D)   constitutes an exception to the law of supply in that they suggest a downward-sloping supply curve.E) None of the above
F) C) and D)

Question 17

An increase in demand accompanied by an increase in supply will increase the equilibrium quantity,
but the effect on equilibrium price will be indeterminate.

Accepted Answer

A) True 
 B)False

Question 18

In understanding and analyzing "demand," we focus on how much of a product the buyers are

Accepted Answer

A)   willing and wanting to buy.
B)   actually buying now and in the recent past.
C)   able to buy with their given income.
D)   willing and able to buy.E) None of the above
F) B) and D)

Question 19

The demand curve shows the relationship between

Accepted Answer

A)   money income and quantity demanded.
B)   price and production costs.
C)   price and quantity demanded.
D)   consumer tastes and quantity demanded.E) B) and C)
F) All of the above

Question 20

In a market with supply and demand curves as shown above, a price ceiling of $2.50 will result in

Accepted Answer

A)   a surplus of 10 units.
B)   a shortage of 10 units.
C)   no shortage or surplus.
D)   a black market price greater than $2.50.E) A) and D)
F) B) and C)

Exam 3: Demand, Supply, and Market Equilibrium

Correct Answer
verified

Since their introduction, prices of Blu-ray players have fallen and the quantity purchased has increased. This statement

Correct Answer
verified

An increase in demand accompanied by an increase in supply will increase the equilibrium quantity, but the effect on equilibrium price will be indeterminate.

Correct Answer
verified

The rationing function of prices refers to the fact that government must distribute any surplus goods that may be left in a competitive market.

Correct Answer
verified

A large increase in the supply of smart TVs occurs simultaneously with a smaller decrease in its demand. As a result, the equilibrium price will

Correct Answer
verified

If the market price is above the equilibrium price,

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The market system automatically corrects a surplus condition in a competitive market by

Correct Answer
verified

In understanding and analyzing "demand," we focus on how much of a product the buyers are

Correct Answer
verified

(Consider This) Dynamic pricing refers to

Correct Answer
verified

All of the following would affect the position of the supply curve for cranberries, except the

Correct Answer
verified

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. Other things equal, a shift of the supply curve from S0 to S1 might be caused by a(n)

Correct Answer
verified

One can say with certainty that equilibrium price will decline when supply rev: 08_10_2020_QC_CS-222790

Correct Answer
verified

Correct Answer
verified

In the diagrams below, the subscript "1" refers to the initial position of the curve, while the subscript "2" refers to the ﬁnal position after the curve shifts. In which diagrams would we see a shortage at the initial price after the indicated curve has shifted?

Correct Answer
verified

In a market with supply and demand curves as shown above, a price ceiling of $2.50 will result in

Correct Answer
verified

The demand curve shows the relationship between

Correct Answer
verified

When the price of oil declines signiﬁcantly, the price of gasoline also declines. The latter occurs because of a(n)

Correct Answer
verified

A government-set price ﬂoor on a product

Correct Answer
verified

Exam 3: Demand, Supply, and Market Equilibrium

Correct AnswerverifiedShow Answer

Since their introduction, prices of Blu-ray players have fallen and the quantity purchased has increased. This statement

Correct AnswerverifiedShow Answer

An increase in demand accompanied by an increase in supply will increase the equilibrium quantity, but the effect on equilibrium price will be indeterminate.

Correct AnswerverifiedShow Answer

The rationing function of prices refers to the fact that government must distribute any surplus goods that may be left in a competitive market.

Correct AnswerverifiedShow Answer

A large increase in the supply of smart TVs occurs simultaneously with a smaller decrease in its demand. As a result, the equilibrium price will

Correct AnswerverifiedShow Answer

If the market price is above the equilibrium price,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The market system automatically corrects a surplus condition in a competitive market by

Correct AnswerverifiedShow Answer

In understanding and analyzing "demand," we focus on how much of a product the buyers are

Correct AnswerverifiedShow Answer

(Consider This) Dynamic pricing refers to

Correct AnswerverifiedShow Answer

All of the following would affect the position of the supply curve for cranberries, except the

Correct AnswerverifiedShow Answer

Refer to the diagram, which shows demand and supply conditions in the competitive market for product X. Other things equal, a shift of the supply curve from S0 to S1 might be caused by a(n)

Correct AnswerverifiedShow Answer

One can say with certainty that equilibrium price will decline when supply rev: 08_10_2020_QC_CS-222790

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the diagrams below, the subscript "1" refers to the initial position of the curve, while the subscript "2" refers to the ﬁnal position after the curve shifts. In which diagrams would we see a shortage at the initial price after the indicated curve has shifted?

Correct AnswerverifiedShow Answer

In a market with supply and demand curves as shown above, a price ceiling of $2.50 will result in

Correct AnswerverifiedShow Answer

The demand curve shows the relationship between

Correct AnswerverifiedShow Answer

When the price of oil declines signiﬁcantly, the price of gasoline also declines. The latter occurs because of a(n)

Correct AnswerverifiedShow Answer

A government-set price ﬂoor on a product

Correct AnswerverifiedShow Answer

Correct Answer
verified

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